Why 'FIR' is the catalyst in burglary insurance claims?

The Burglary insurance policy broadly covers loss and/or damage by burglary, housebreaking including hold-up risk and damage caused to premises. This policy provides cover for property contained in business premises, stocks owned or held in trust and/or commission. It can be further extended to cover cash, valuables, securities kept in a locked safe or cash box in locked steel cupboard.

What is Burglary?

Burglary denotes the act of entering a property unlawfully with the intention of committing a crime and it might not always involve theft following upon actual, forcible and violent entry of and/or exit from the premises. Burglary insurance, then, will cover property damage as well as financial losses arising from the theft of property from within the premises. In case of burglary the entry of an intruder is by force.

Burglary Coverage:

Property such as stocks and furniture owned by the insured in the business premise is covered. Stocks held in trust/ commission and for which the insured is responsible, if specifically covered. Stocks can be insured on 'First Loss' basis; stock frequently fluctuating in value can be insured on declaration basis and on floater basis if stored at various locations.

Key benefits:

The policy provides coverage in respect of all types of insured property such as stock in trade, furniture. The Sum Insured should be fixed on current market prices for stocks. The policy covers loss of or damage to insured property due to burglary, housebreaking robbery, dacoity and damage to the premises by burglars. Theft, Riots, strikes and terrorist damage are the main extensions to the policy.

FIR connection:

Burglary is an unlawful entry to a structure for the purposes of committing theft or another felony. Unlike a robbery, no victim needs to be present at the scene of a crime for a burglary to take place. Robbery is defined as the act of taking or attempting to take something that has value from someone by using intimidation, force, or threats. Before paying any claims, insurance companies require documented proof of ownership of the goods prior to the burglary and a FIR registered with the police authorities. The insured has to lodge formatted FIR`s in such situations.

Establishment of crime:

Burglary policy covers entry by force and not negligence. The claim can be rejected if the stock/goods are stolen with the help of keys. Police investigate the facts whether the key was obtained by force and the entry is forcible, may be at the gun-point or by housebreaking. It also acts as proof that there is no intention to defraud the insurance company. When something is stolen, then, according to Section 379 of IPC, FIR is filed and when something is lost, then Non-Cognizable Report is filed. NCR remains in the records of the police station, it is not sent to the court. Police also do not investigate for it.

In a burglary claim FIR is the catalyst to decide the admissibility of the claim. FIR is a written document prepared by police after receiving information. Police do not immediately register the FIR in cases of theft and some other ordinary things because police wait for the recovery of the stolen things of the victim. FIR is filed only for cognizable offences. According to it, the police have the right to arrest the accused person and investigate into the matter. If an offence is not cognizable, the FIR is not filed and in that case, the action is not possible without the intervention of the court. However, insurers invariably insist for FIR in case of burglary claims.

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